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I Information

Court of Auditors

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SPECIAL REPORT No 6/2006

concerning the environmental aspects of the Commission's development cooperation, together with the Commission's replies

(pursuant to Article 248(4), second subparagraph, EC)

(2006/C 235/01)

CONTENTS

ABBREVIATIONS AND TERMINOLOGY

ANNEX I — OECD Development Assistance Committee — project classification

ANNEX II — Environment projects examined and an assessment of their effectiveness

ANNEX III — Overview of project effectiveness

The Commission's replies

ABBREVIATIONS AND TERMINOLOGY
ACP

African, Caribbean and Pacific States signatory to the Cotonou Agreement

ALA

Asia and Latin America developing countries

CEPs

Country Environment Profile

CSP

Country Strategy Papers

DFID

British Department for International Development

DG DEV

Directorate-General for Development

DG ENV

Directorate-General for Environment

DG Relex

Directorate-General for External Relations

DWNP

Department of Wildlife and National Parks

ECOFAC

Ecosystèmes Forestiers d'Afrique Centrale

EIA

Environmental Impact Assessment

Europeaid

Europeaid Cooperation Office

FAO

Food and Agriculture Organisation

GEF

Global Environment Facility

iQSG

Interservice Quality Support Group

KfW

German Kreditanstalt für Wiederaufbau

MDGs

Millennium Development Goals

MEAs

Multilateral Environment Agreements

MEDA

Measures to accompany the economic and social reforms in the Mediterranean non-member countries

NRPP

Natural Resources Policy Programme

OECD

Organisation for Economic Cooperation Development

OECD DAC

Development Assistance Committee of the Organisation for Economic Cooperation and Development

OQSG

Office Quality Support Group (OQSG)

PEP

Poverty and Environment Partnership

PRSP

Poverty Reduction Strategy Papers

SEA

Strategic Environmental Assessment

UNDP

United Nations Development Programme

UNEP

United Nations Environment Programme

WSSD

World Summit on Sustainable Development

WWF

World Wildlife Fund

SUMMARY

INTRODUCTION

Background

Audit scope and approach

COMMISSION STRATEGY FOR THE ENVIRONMENTAL ASPECTS OF ITS DEVELOPMENT AID

Introduction

Need for a clear and comprehensive environment strategy

Adequate management arrangements for implementing the Commission's environment mainstreaming strategy and assessing the environmental performance of its development aid are still to be made

Mechanism for overseeing the implementation of the environmental mainstreaming strategy

Building the Commission's capacity to implement the environmental mainstreaming strategy

Systems for assessing the environmental performance of the Commission's development aid

AN ASSESSMENT OF THE EFFECTIVENESS OF THE COMMISSION'S ENVIRONMENTAL MAINSTREAMING

Introduction

Progress was made in 2005 in developing country environmental analysis for new Country Strategy Papers although its impact cannot yet be assessed

Little has been done to mainstream the environment into budgetary support programmes

Procedures for environmental mainstreaming at project level have not been sufficiently systematic

AN ASSESSMENT OF THE EFFECTIVENESS OF ENVIRONMENT PROJECTS AND FACTORS INFLUENCING EFFECTIVENESS

Introduction

Assessment of project effectiveness

Analysis of factors affecting effectiveness of environment projects

Overambitious design of projects

Delays in project preparation and implementation

Limited progress in institutional capacity building

The need for greater focus on the sustainable use of natural resources by local communities

Insufficient impact of projects on policy and legal framework

Unrealistic approach to financial viability

CONCLUSIONS AND RECOMMENDATIONS

Conclusions

Recommendations

Establishing a comprehensive strategy for the environment and following up its implementation

Improving the effectiveness of environmental mainstreaming

Improving the effectiveness of environment projects

This report was adopted by the Court of Auditors in Luxembourg at its meeting of 15 June 2006.

For the Court of Auditors

Hubert WEBER

President

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(1)  When addressing these key questions, the audit took into account the environmental auditing guidelines of the International Organisation of Supreme Audit Institutions (INTOSAI).

(2)  The main reason for focusing on forestry is that the Commission has a special budget line for tropical and other forests (see paragraph 10). While a special ACP-EU Water Facility was created in 2004, this is still at an early stage of implementation.

(3)  The other two pillars are economic well-being and social development. The most widely used definition of sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs (1987 Bruntland Report on Environment and Development).

(4)  Article 177 of the EC Treaty states that sustainable development is an objective of development cooperation.

(5)  Article 32 of the Cotonou Partnership Agreement signed on 23 June 2000 (OJ L 317, 15.12.2000).

(6)  Article 5 of Council Regulation (EEC) No 443/92 of 25 February 1992 on financial and technical assistance to, and economic cooperation with, the developing countries in Asia and Latin America (OJ L 52, 27.2.1992, p. 1).

(7)  Annex II of Council Regulation (EC) No 1488/96 of 23 July 1996 on financial and technical measures to accompany (MEDA) the reform of economical and social structures in the framework of the Euro-Mediterranean partnership (OJ L 189, 30.7.1996, p. 1).

(8)  Regulation (EC) No 2494/2000 of the European Parliament and of the Council of 7 November 2000 on measures to promote the conservation and sustainable management of tropical forests and other forests in developing countries (OJ L 288, 15.11.2000, p. 6).

(9)  The Commission Staff Working Paper ‘Proposal for a Joint Declaration by the Council, the European Parliament and the Commission on the EU Development Policy’ of 13 July 2005 envisaged ‘greater attention to the environmental dimension of sustainable development through its “promotion” from cross-cutting theme ... to explicit objective of EU aid mirrored by detailed thematic priorities of EC aid’.

(10)  The Commission did organise a more specific evaluation of the Environment and Tropical Forest budget line, as laid down in the related Regulations in 2004.

(11)  In 2002 the World Bank introduced a new two-dimensional coding system. Each loan is tracked by both theme and sector codes. The 11 theme codes correspond to the goals and objectives of Bank activities and the 12 sector codes indicate the parts of the economy that directly benefit from Bank support. Environment and natural resource management is 1 of 11 themes.

(12)  Since the end of the 1990s developing countries have established Poverty Reduction Strategy Papers to provide a framework for domestic policies and programmes, as well as for foreign assistance, with the overall aim of reducing poverty.

(13)  Status and evolution of environmental priorities in the poverty reduction strategies: an assessment of fifty poverty reduction papers. Environment department papers, World Bank, November 2003.

(14)  OECD Development Assistance Committee. Guidelines on Aid and Environment. No. 2: ‘Good Practices for Country Environmental Surveys and Strategies’. The equivalent term used by the Commission is Country Environmental Profile (CEP).

(15)  Regulation (EC) No 2493/2000 of the European Parliament and of the Council of 7 November 2000 on measures to promote the full integration of the environmental dimension in the development process of developing countries (OJ L 288, 15.11.2000, p. 1).

(16)  Council conclusions on a strategy on the integration of environmental concerns into EC economic and development cooperation to promote sustainable development paragraph 3.6 (8971/01).

(17)  Council conclusions on a strategy on the integration of environmental concerns into EC economic and development cooperation to promote sustainable development paragraph 3.14 (8971/01).

(18)  At the time of the audit the OECD DAC had a working party on the use of SEAs in the context of development cooperation.

(19)  The three categories foreseen are: A — High Environmental Impact, B — Significant possible environmental risks and opportunities, C — Low Environmental Impact.

(20)  Council Directive 85/337/EEC of 27 June 1985 on the assessment of the effects of certain public and private projects on the environment (OJ L 175, 5.7.1985, p. 40), amended by Council Directive 97/11/EC of 3 March 1997 (OJ L 73, 14.3.1997, p. 5).

(21)  Article 37 of Fourth ACP-EEC Convention signed at Lomé on 15 December 1989 (OJ L 229, 17.8.1991).

(22)  OECD Development Assistance Committee Guidelines on Aid and Environment No. 1 ‘Good Practices for Environmental Impact Assessment of Development Projects’, Paris 1992.

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ANNEX I

OECD DEVELOPMENT ASSISTANCE COMMITTEE — PROJECT CLASSIFICATION

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(1)  OECD Development Assistance Committee Code.

(2)  Creditor Reporting System Code.

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ANNEX II

ENVIRONMENT PROJECTS EXAMINED AND AN ASSESSMENT OF THEIR EFFECTIVENESS

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ANNEX III

OVERVIEW OF PROJECT EFFECTIVENESS

This annex is intended to provide the reader with background information on individual environment projects audited in each of the countries/regions visited during the Court's audit. It is, not, however, intended to give a conclusion on the overall effectiveness of environment projects in a particular country.

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(1)  This programme was created at the 1990 summit of the ‘Group of Seven’ (G-7) industrialized countries, in the wake of growing concerns about rapid deforestation in the Amazon basin. The Government of Brazil launched the programme in 1992 at the Earth Summit in Rio de Janeiro.

(2)  Another project financed by the Environment and Forests budget line is following up the activities of the Tawahka Asangni Reserve.

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THE COMMISSION REPLIES

SUMMARY

COMMISSION STRATEGY FOR THE ENVIRONMENTAL ASPECTS OF ITS DEVELOPMENT AID

AN ASSESSMENT OF THE EFFECTIVENESS OF THE COMMISSION'S ENVIRONMENTAL MAINSTREAMING

AN ASSESSMENT OF THE EFFECTIVENESS OF ENVIRONMENT PROJECTS AND FACTORS INFLUENCING EFFECTIVENESS

CONCLUSIONS AND RECOMMENDATIONS

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